Minerva Foods swings to R$717 million loss as cattle costs jump 24%

Minerva Foods posted a net loss of R$717.3 million in the third quarter of 2026, reversing net income of R$120.0 million a year earlier, as the cost of slaughter-ready cattle rose roughly 24% year on year and a negative financial result of R$1.6 billion weighed on the bottom line.

Net revenue reached R$14.5 billion in the quarter, up 3.0% from the second quarter, the company reported. Revenue over the last twelve months totalled R$56.2 billion, up 9.5%. The quarterly figure came despite lower cattle availability, mainly in Brazil, and reduced shipments to China after Brazil exhausted its quota under China's safeguard measure.

How did margins hold while the loss widened?

Gross margin improved to 17.1%, from 16.5% in the third quarter of 2025 and 16.6% in the second quarter, with gross profit of R$2.5 billion. Minerva credited higher beef prices in both exports and domestic distribution — an increase that only partly offset the 24% rise in cattle costs.

EBITDA fell to R$1.2 billion, an 8.3% margin, down 13.6% from the third quarter of 2025 and 2.6% from the second quarter. Twelve-month EBITDA stood at R$4.7 billion, up 2.7%, with an 8.4% margin. The gap between improving gross margin and the widening net loss traces almost entirely to the financial result; operations weakened, but leverage did the heavier damage.

What carried revenue when Brazil fell?

Gross revenue by origin shows the shift. Brazilian operations generated R$8.1 billion, down 19.0% from the third quarter of 2025, on tighter cattle supply and fewer China shipments. The gap was filled elsewhere:

• Paraguay: R$2.5 billion, up 50.5% year on year
• Argentina: R$1.7 billion, up 44.0%
• Australia: up 25.0%
• Colombia: up 27.0%

Chief executive Fernando Galletti de Queiroz framed the quarter around that spread. "We closed the first nine months of 2026 in a challenging market environment, marked by changes in international trade flows and by different stages of the global cattle cycle," he said. "In this context, Minerva Foods' geographic diversification and operational flexibility were essential to adapt our activities to supply and demand conditions and to preserve the competitiveness of the business."

The claim is directionally supported by the origin breakdown; the company did not quantify how much diversification offset in margin terms, and the EBITDA decline suggests the offset was partial at best.

Where does the balance sheet stand?

Net leverage ended September at 3.2 times. Minerva held R$13.9 billion in cash and cash equivalents, which it says covers its debt amortisation schedule through 2029. So far this year the company has repurchased and cancelled about $234.6 million (R$1.2 billion) of international bonds, including the redemption of the 2028 bond, plus R$66.2 million of local debt securities.

Over the last twelve months, the net loss narrowed by 56.7%, to R$348.2 million from R$803.9 million — a sign the trajectory is improving even as the quarterly print worsened.

With cattle costs up 24% and the China quota exhausted for Brazil, fourth-quarter results will test whether export price strength and the Paraguay and Argentina operations can keep pace with the squeeze on Brazilian slaughter margins.